Inter-cultural dimensions to note when negotiating with Chinese negotiators

Author: Iloka Benneth Chiemelie

Published: 15-October-2014

Introduction

In accordance with Buttery and Leung (1998), China is one of the most challenging countries when it comes to conducting business negotiation. This is in line with the finding by Woo (1999, p. 116), which made known that western businesses entering into negotiation with Chinese businesses re normally confronted with strong adversarial bargaining which appears to lack necessary politeness and considerations, and the study also discovered that Chinese negotiators are tenacious, tough and shrewd. In order to understand reasons why negotiation with Chinese people is influenced by great difficulties for western businesses, the above authors placed more focus on the influence of Chinese culture on negotiation style; however, Ma (2006) has questioned the reliability of such claims. For instance, a number of investigations have been conducted in relation to aspect such as Confucianism, Taoism, face, guanxi, patience, collectivism, and social status. As such, this research will look into these aspects in terms of how they influence negotiation process amongst Chinese negotiators and what foreigner negotiators need to understand in order to ensure smooth negotiation process without cultural stereotyping.

Inter-cultural dimensions to note when negotiating with Chinese negotiators

Amidst the numerous intercultural dimensions, the three most significant when negotiating with Chinese negotiators as a result of their emphasis on communication styles are Hall’s high- and low-context cultures, and Hofstede’s power distance and individualism and collectivism (Hall, 1976; Hofstede, 1991). Additionally, there are also discussions on Confucianism as a result of its high influence on Chinese culture. These cultural dimensions are very relevant when it comes to negotiation process in the Chinese culture. For instances, when negotiators from other cultures have a different expectation with respect to the Chinese negotiator process, it can have an influence as to where the first step ends and where the second step begins.

In accordance with Hall (1976, p. 79), a high-context culture is characterized by the physical context internalized in the person as opposed to the coded, transmitted part of the message. On the contrary, a low-context culture features the importance of information which are inherent in the explicit code (Hall, 1976, p. 70).  When comparing the differences between Chinese and American cultures, Lin and Miller (2003, p. 288) made known that the Chinese are high-context in nature and as such they are not likely to express their own views openly and explicitly like the Americans. As such, this can be a big issue between Chinese and American negotiators for instance, as the American will push the Chinese to be more open and direct, while the Chinese might be offended by the push to the open and direct – thus affecting the whole negotiation process and having an impact in outcome.

Hofstede’s power distance is another cultural dimension that influences cross-cultural negotiation process with Chinese negotiators. Power distance has been descried as to the extent at which the less powerful members of an institution concur that power is not distributed equally (Hofstede and Bond, 1984, p. 419). When it comes to negotiation, different cultures have different attitude to distribution of power and hierarchy. For instance, the Chinese are characterized with having strict hierarchical system and placing high emphasis on ranking (Sabath, 1999, p. 38), whereas the Americans attribute less attention to social ranking. In the negotiation process, an American might be talking directly to the highest ranked negotiator in the Chinese ranks, and such conversation can involve an open and direct request or accusation – which violates the Chinese codes of power distance. Thus, this can be an issue as the highest ranked negotiator can influence direct and instant decision in the negotiation process, which a subsequent influence on the outcome of the negotiation process.

Additionally, Hofstede (1991) grouped cultures based on the dimensions of individualism and collectivism. Collective societies are more focused on the outcome of their decision and behaviors on in-group members, while individualistic societies are focused on the impact of their behavior and decisions on themselves. A meta-analysis by Sama and Papamarcos (2000) shows that as a collectivist society, Chinese negotiators emphasis on group goals, and put necessary efforts towards maintaining relational harmony while Australian or American negotiators value autonomy and personal interests, and encourage competition. This is a big issue in the negotiation process as American negotiators can be viewed by their Chinese counterparts as being selfish and it can affect the outcome of the negotiation process.

Confucianism emphasis on the social responsibilities of individuals towards one another. It also advocates for social order that values honour, duty, loyalty, respect for age, filial piety and sincerity (Seligman, 1999). As Confucians, Chinese negotiators have the tendency to favor organizational hierarchy and centralized decision, as well as being more concerned about righteousness and human-heartedness as opposed to profit which is the likely case in an American or western decision process. This can impact negotiation because Chinese negotiators can come back with a changed plan or opposing ideas to what was previously agreed because their management can affect the decision process.

Conclusion

From the above discussion, it is clear that differences in cultural dimensions does influences both the negotiation process and outcome of a negotiation when it comes to inter-cultural negotiation. In the case of China (which is a high-context, collective, higher power distance, and Confucian culture), it is important that foreign negotiators understand these facets and incorporate them in their negotiation process in order to ensure smooth negotiation and favorable outcome.

References

Buttery, E.A. and Leung, T.K.P. (1998), ‘‘The difference between Chinese and western negotiations’’, European Journal of Marketing, Vol. 32, pp. 374-89.

Hall, E.T. (1976), Beyond Culture, Doubleday, New York, NY.

Hofstede, G. and Bond, M. (1984), ‘‘Hofstede’s culture dimensions’’, Journal of Cross-Cultural Psychology, Vol. 15, pp. 417-33.

Hofstede, G.H. (1991), Cultures and Organizations: Software of the Mind, McGraw-Hill, New York, NY.

Lin, X. and Miller, S.J. (2003), ‘‘Negotiation approaches: direct and indirect effect of national culture’ ’International Marketing Review, Vol. 20, pp. 286-303.

Ma, Z. (2006), ‘‘Negotiating into China: the impact of individual perception on Chinese negotiation styles’’, International Journal of Emerging Markets, Vol. 1 No. 1, pp. 64-83.

Sabath, A.M. (1999), International Business Etiquette, Career Press, Franklin Lakes.

Sama, L.M. and Papamarcos, S.D. (2000), ‘‘Hofstede’s I-C dimension as predictive of allocative behaviors: a meta-analysis’’, International Journal of Value-based Management, Vol. 13 No. 2, pp. 173-88.

Seligman, S.D. (1999), Chinese Business Etiquette – A Guide to Protocol, Manners, and Culture in the People’s Republic of China, Warner Books, Inc., New York, NY.

Woo, H.S. (1999), ‘‘Negotiating in China: some issues for western women’’, Women in Management Review, Vol. 14, pp. 115-20.